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In Depth

In the latest chapter of one of the longest-standing global trade disputes, the World Trade Organisation (WTO) has ruled that the European Union’s preferential treatment of banana imports from former colonies infringed WTO rules and harmed the United States’ trade rights. In June 2007, the United States complained to the WTO, alleging that the European Union had failed to implement a 2001 agreement that, among other things, called for a transition to a tariff-only system for banana imports by 2006. The United States observed that the European Union continued to import bananas on a duty-free basis from former colonies, while applying a tariff to banana imports from other countries. The WTO’s compliance panel agreed with the United States, following a similar recent decision in favour of Ecuador and left open the possibility for sanctions against the European Union. The European Union vowed to appeal the WTO ruling, arguing that, among other things, the ruling is irrelevant since preferential import treatment for former colonies ended on 1 January 2008.

Agriculture: CAP Reforms Proposed

Philip Bentley

The European Commission has presented the European Parliament with its latest proposals to reform the Common Agricultural Policy (CAP). With food prices increasing worldwide, the Commission wants to encourage farmers to produce more after years of trying to deal with overproduction. Thus, the main thrust of reform is to remove restrictions on farmers allowing them to respond to market forces. The Commission proposes to phase out milk quotas from 2015. Current rules on keeping 10 per cent of farmland fallow would be abolished, which could bring around 10 to 12 million acres back into production. Current handouts to farmers would also be reduced. The proposals are scheduled for adoption during the second half of 2008 when France, the biggest national recipient of EU farm subsidies, holds the rotating EU presidency.

State Aid: France Télécom’s Employee Pensions Under Scrutiny

Mélanie Bruneau

The European Commission has decided to launch an in-depth investigation, under the EC State aid rules, into the reform of the financing arrangements for the retirement pensions of State employees working for France Télécom. This reform was introduced in 1997 when the telecommunications sector was liberalised. The Commission's investigation started as a result of a complaint from a telecommunications operator alleging that the reduction in France Télécom’s retirement costs and the exemption from social security contributions constitute incompatible State aid. According to the French authorities, the reform removed a structural disadvantage for France Télécom. The Commission will review: (i) whether the reform constitutes State aid; and (ii) whether it is compatible with the Single Market. Third parties will be given the opportunity to comment on the measure.

Customs: Significant Increase in Seizures at EU Borders

Geert Dierickx

Statistics from the European Commission relating to counterfeit and piracy show a significant increase in customs enforcement activity. In 2007, over 43,000 cases of counterfeit goods were seized, compared to 37,000 in 2006. However, the number of articles seized decreased from last year’s peak of 128 million articles to around 79 million, due to a number of seizures involving smaller quantities of counterfeit and pirated articles. Besides cigarettes and clothing, medicines, electrical equipment and personal care products are also frequently counterfeited. Most of the counterfeit goods originate in China, although Switzerland, India and the United Arab Emirates lead the exports of fake medicines. In order to stop shipments of counterfeit goods at EU borders, the Commission welcomes the industry’s input in detecting these goods and cooperating with the customs authorities.

Consumer Protection: Launch of “CosIng”: New Database for Cosmetic Ingredients

Patricia Armesto

The European Commission has launched a new online database of the ingredients used in cosmetic products. The new database, called “CosIng” (COSmetics INGredients), contains more than 15,000 cosmetics ingredients and replaces the old pdf-formatted list, making it more accessible and user-friendly. Using CosIng, businesses and authorities can now check if and how a substance is regulated at EU level and obtain access to the opinions of the Scientific Committee on Consumer Products. The Commission’s view is that CosIng will: i) make it easier for companies to find up-to-date information on substances needed to develop new cosmetics or to improve existing ones; and ii) facilitate market surveillance by the competent authorities and contribute to the safety of cosmetic products.

In March 2007, an initiative was launched by the European Data Protection Supervisor (EDPS) to review the processing of personal data by EU institutions. The initiative was undertaken to monitor compliance with the implementation of the EC Regulation on Data Protection. On 14 May 2008, the EDPS presented a report stating that the initiative had been a success in that it had raised awareness amongst EU staff on data protection issues and resulted in the appointment of a Data Protection Officer in every EU institution. The report did, however, highlight that although the level of data protection notifications was generally satisfactory, on-the-spot inspections should be undertaken in order to encourage and closely monitor future progress and to measure compliance with the Regulation.

NEXT WEEK’S EVENTS

Monday 26 May – Friday 30 May 2008

COUNCIL MEETINGS

General Affairs and External Relations Council (GAERC) including Defence Ministers and Development Ministers (26 – 27 May 2008)

Competitiveness Council (29 – 30 May 2008)

COURT OF JUSTICE

There will be no sitting of the Court of Justice during the week from 26 May 2008 to 1 June 2008 inclusive.

COURT OF FIRST INSTANCE

There will be no sitting of the Court of First Instance during the week from 26 May 2008 to 1 June 2008 inclusive.